Monthly Archives: July 2017

The U.S. House of Representatives’ Committee on Appropriations recently voted to send HR 3358 to the full House for debate and a vote. This bill appropriates funds for federal student aid programs for federal Fiscal Year (FY) 2018.

Here’s a summary of HR 3358’s key financial aid provisions as currently written. But they’re not final yet, and you should tell your congressperson what you think about them. Visit during their August recess, or call or write them. For their contact information, go here and enter your zip code.

Federal Pell Grant

This program provides grants of $600 to $5,920 to the nation’s neediest students. It has a $4.3 billion surplus that could be used to increase the size of these grants or provide grants to additional needy students.

HR 3358 would reduce this surplus by $3.3 billion and keep Pell Grant amounts the same as they were in FY 2017. With inflation, this would reduce the Pell Grant’s “purchasing power” — the portion of college-related expenses covered by Pell. Furthermore, it would not provide Pell Grants to any more students.

Federal Supplemental Educational Opportunity Grant (FSEOG)

FSEOG goes to the poorest Pell Grant recipients — mostly those with family incomes below $30,000 per year.

HR 3358 would put the same amount into FSEOG for FY 2018 as that program received for FY 2017. FSEOG would be unable to help any additional students and its purchasing power would diminish

Note: As Pell Grant and FSEOG purchasing power decline, it’ll be necessary for colleges and states to divert more of their grant and scholarship dollars to help Pell and FSEOG-eligible students. This would reduce the numbers of college and state awards available to students who are not needy enough to receive Pell and FSEOG, but who still need plenty of financial assistance to go to or remain in college.

Federal Work-Study (FWS)

Hundreds of thousands of needy college student get part-time jobs through FWS. Most of these jobs are on-campus and many are related to students’ majors.

The administration proposed to cut FWS appropriations by 50%. But HR 3358 rejects this proposal and keeps FY 2018 FWS funding the same as it was for FY 2017. Still, there would be little or no opportunity for additional numbers of students to secure FWS jobs unless the program receives more funding.

Time to Act!

HR 3358 could affect your student’s financial aid even if he doesn’t receive Pell Grant, FSEOG, or FWS. So don’t sit on the sidelines! Make your voice heard!

If you borrowed private student loans for your postsecondary education, and if an organization called National Collegiate Student Loan Trusts (National Collegiate) asserts you owe loan payments to it, double check everything it says about how much you owe and whether it actually owns your loans.

The New York Times reports that courts across the United States have dismissed many educational loan debts supposedly owed to National Collegiate because its was unable to prove that it had actually purchased those loans from lenders who originally made them. And in at least one case, a court dismissed part of a college graduate’s debt after finding that some loans for which National Collegiate was billing her were for enrollment at a school she never attended.

Note: National Collegiate is a “secondary market” that buys private student loans after they’re made, giving it the right to collect what borrowers owe in principal and interest on those loans. It has been particularly aggressive in going to court against private student loan borrowers unable to repay their debts.

National Collegiate contracts with American Education Services to provide its borrowers with services and do routine collections on its loans. The Times reports it uses a collection agency called Transworld Systems to collect debts when borrowers fall behind on their payments.

If any of your private student loans are being collected by either of these companies, determine whether National Collegiate Student Loan Trusts says it owns them. To do this, contact American Education Services and/or Transworld Systems to inquire. If they list National Collegiate as the owner of any of your loans, double check your records to confirm whether you actually borrowed them. If not, ask for documents proving you borrowed the loans and establishing what the courts call a “chain of title” to prove National Collegiate’s ownership.

Note: There are no reports of any federal or state student loans being dismissed by courts because of the irregularities described above.

Never stop making payments on and debt you really do owe. This can cost you big bucks and ruin your credit rating. And never, ever, use false or misleading information to try to get out of any of your debt obligations. That’s called a criminal offense called fraud!

But if there are questions about debts National Collegiate Student Loan Trusts says you owe it, retain a law firm or seek help from your local legal aid society if necessary. Don’t get ripped off!

We’re on summer vacation at College Affordability Solutions, but this issue was too important to ignore. Join us next month when we again begin publishing regular weekly blogs.